Heavy truck industry: waiting for the bottom of the industry, low valuation has a high margin of safety
The economic recovery will drive the recovery of the heavy truck industry. As the economy recovers further, loose monetary policy will promote the expansion of enterprises, which will lead to the demand for logistics. At the end of 2008, the government’s RMB 4 trillion investment in infrastructure will also stimulate demand for construction vehicles. Logistics demand and engineering demand will drive the recovery of the entire heavy truck industry. However, due to the backlog of more transportation capacity in 2008, the recovery of the heavy truck industry will lag behind consumption, fixed asset investment and other indicators.
The characteristics of the industry determine that the recovery of commercial vehicles during the recovery process is slower than that of passenger vehicles. Passenger cars as consumer goods, in the early stages of economic recovery, once residents' income expectations are improved, they will immediately be able to form new car demand. As a means of production, trucks are used in production operations. After the recovery of various commodity demand, it is necessary to digest the commodity inventory first, and then the logistics demand will pick up. However, it is also necessary to digest the idle capacity of the truck, and it will take longer to finally pull the new demand.
The drivers of recovery have gradually emerged. Since 2009, the growth rate of investment in urban fixed assets has accelerated month by month. In May, the growth rate reached 38.67%, which has reached a record high. The substantial increase in investment in fixed assets has led to an increase in the turnover of goods. In the first three months of 2009, the growth rate of freight turnover increased month by month, being 11.7%, 14.7%, and 16.8%, respectively. The investment in fixed assets will boost the demand for construction vehicles; the increase in cargo turnover will increase the demand for animal currents and further stimulate the growth in demand for transport vehicles.
The industrial structure is tilted toward dominant companies, and the Steyr platform has obvious advantages. Heavy truck market concentration is high.
The top five companies together accounted for more than 80% of the market share. Steyr trucks have the advantages of strong power, strong overload capacity, durable chassis, cheap parts, and easy maintenance. The disadvantage is poor comfort and poor appearance. However, due to the constraints of China's current economic development stage, the transport market still puts performance and cost first, making Steyr very suitable for the Chinese market. Steyr's traditional production companies, including heavy truck, Shaanxi Auto, and Hongyan, will continue to maintain their advantages.
Investment strategy and key companies. Based on the premise of further economic recovery, we believe that the heavy truck industry will begin to recover around the fourth quarter of 2009, while the secondary market will begin to perform well in the third quarter. The main driving force is the investment in fixed assets brought by government investment; the demand for logistics is increasing; the factor that hinders the industry from recovering is that the capacity of trucks for stocks needs to be digested. The major listed companies in the heavy truck industry, Weichai Power and CNHTC's valuation are lower than the market average, and the situation will further improve in the second half of the year, with a high safety margin. Guodu Securities Co., Ltd.